Platinum Equity buying a piece of US LBM
US LBM has signed a definitive agreement for Platinum Equity to acquire a stake in the company from Bain Capital Private Equity.
Bain Capital and Platinum Equity will have equal ownership stakes and joint board governance. US LBM will continue under the leadership of Founder, President and CEO L.T. Gibson and the current management team.
Financial terms of the deal and the size of the piece of the company Platinum Equity is acquiring were not disclosed.
Bain Capital acquired a majority stake of US LBM in November 2020.
Founded in 2009 with 16 locations in three states, US LBM has grown into one of the nation’s leading distributors of specialty building materials, operating more than 450 locations throughout the country. The company offers a comprehensive portfolio of specialty products, including windows, doors, millwork, wallboard, roofing, siding, engineered components and cabinetry.
"Our strategy of combining our national scale with a strong local market focus has continued to drive significant growth for US LBM, and Bain Capital’s support has helped accelerate our expansion into several new housing markets while furthering investment in our people, operations and technology to enhance the value we bring to our suppliers, customers and communities," said Gibson. "US LBM's national platform, strong supplier relationships, commitment to operational excellence and boosting organic in-market growth continue to make us an acquirer of choice in the building materials industry. We look forward to working with Platinum and our ongoing partnership with Bain Capital. Their combined operational expertise and experience in the building products space will be a significant asset in driving the growth and expansion of our business."
Platinum Equity Co-President Jacob Kotzubei said he believes in the company’s short and long-term prospects.
"US LBM has built an impressive, diversified business with scale while preserving a vibrant, entrepreneurial spirit," said Kotzubei. "In the near term, we think the company’s footprint, financial profile, and operating model will allow it to continue growing and strengthening its operations as it navigates the complexities of the current environment.”
Kotzubei added, “We are optimistic about the outlook for new housing over the long term given the nationwide shortage stemming from years of underbuilding that has created an imbalance in supply and demand. We look forward to working with the company’s leadership group and our partners at Bain Capital to put our financial and operational resources to work."
Over the last three years, Atlanta, Georgia-based US LBM has approximately tripled sales and profit as a result of an accretive mergers and acquisitions strategy, combined with investments in data and analytics, supply chain optimization, and customer experience.
US LBM said it has successfully leveraged its national scale and operations while diversifying its product mix, expanding its structural components manufacturing capabilities and building deep, local customer relationships.
"We are excited to continue our successful collaboration with L.T. and the talented US LBM team. As the fundamental outlook for new home construction in the U.S. remains strong, we believe the company is poised to further build out its integrated platform through organic growth initiatives and strategic acquisitions," said Stephen Thomas, a partner at Bain Capital Private Equity.
Platinum Equity recently signed a definitive agreement to acquire Cook & Boardman, a leading specialty distributor of commercial door and security integration solutions. Other building products companies in the firm’s current portfolio include: JELD-WEN’s Australasia business; Cabinetworks, a leading US manufacturer and distributor of kitchen and bath cabinets; and PGS, a provider of hard surface floor coverings.
The US LBM transaction is expected to close by the end of Q1 2024 and is subject to customary closing conditions, including requisite regulatory approvals.
RBC Capital Markets LLC, Jefferies and Barclays are serving as financial advisors, and Kirkland & Ellis LLP is serving as legal advisor, to US LBM and Bain Capital.
Moelis & Company LLC is serving as financial advisor, Gibson, Dunn & Crutcher LLP is providing legal counsel, and Willkie Farr & Gallagher LLP is providing debt structuring counsel to Platinum Equity on the investment in US LBM.
